For most people, the word “Salvage Car” is not something they would want to hear, let alone purchase. If you asked 10 people what they think of salvage cars, I’m sure 9 of them would say that they are completely smashed up, totaled vehicles that belong in a junkyard. In some cases, this may be true. When I hear the word Salvage Car, I think of something completely different – I think of the word opportunity:
- The opportunity to buy much more car than I can afford
- The opportunity to drive a car that will outlast my loan payments
- The opportunity to sell a car for more than I purchased it
Today’s salvage cars are far different than they were in years past. Before we dive any deeper, let’s talk about what we mean by the term salvage car. The New York State Department of Motor Vehicles brands a car as “salvage” when:
“.. the vehicle was destroyed or received damage of 75% or more of the retail value of the vehicle at the time the damage occurred….”
The rules for branding vehicles as salvage will differ from state to state, but this basic definition applies in most cases. Some states will declare salvage as low as 60% and others as high as 85%.
Now that we know what a salvage car is, let’s talk about how a car comes to be branded this way. The most obvious reason for cars to be branded salvage are through collisions. Multi-car collisions are one of the most common causes of salvage branding. Cars can become salvage for a variety of other reasons, including:
- Fresh and salt-water floods
- Storm damage (hurricanes, hail, etc.)
- Vandalism
- Recovered thefts
In almost all of these cases, insurance companies pay off the original vehicle owners and take possession of the cars. Since they are not in the car business, their goal is to liquidate the damaged vehicle as quickly as possible. Salvage auctions provide them with an excellent channel for selling off their salvage automobile inventory.